ING CEO Open to Block Trade to Sell Rest of Sul America
ING Groep NV (INGA), the biggest Dutch financial-services company, is open to selling the approximately 10 percent it still owns in insurer Sul America SA in a block trade, Chief Executive Officer Ralph Hamers said.
The stake would be worth about 566 million reais ($253 million), based on Rio de Janeiro-based Sul America’s market value of 5.66 billion reais. The sale is part of ING’s plan to exit global insurance businesses by the end of 2016, Hamers, 48, said in an interview yesterday at the Amsterdam-based company’s offices in Sao Paulo.
ING must sell non-bank businesses as a condition of its European Union-approved 10 billion-euro bailout from the Netherlands in 2008. The firm completed the sale of an 11 percent stake in Sul America (SULA11) to Swiss Re Ltd. in January. It sold another piece to the World Bank’s International Finance Corp. in a deal announced last year.
“It’s kind of the last moment in the divestment of the insurance companies that repositions ING as a bank only,” Hamers said. “We’re not under pressure, we’re not in a hurry. The only deadline we have is 2016.”
Separately, ING said yesterday it’s selling as much as 1.54 billion euros ($2.1 billion) in the initial public offering of its European insurance unit.
As it exits its stake in Sul America, ING still plans to expand its commercial-banking business in Brazil, which has about 100 employees, Hamers said.
“We have doubled in size in terms of balance sheet to Brazil in the past 12 months,” he said, declining to specify the total amount of loans outstanding.
The business is now aligned with ING’s global strategy, Peter Vissers, the firm’s Brazil country manager and president since Sept. 1, said in the joint interview.
“We are very focused on structured finance, structured lending, trading and commodities finance, metals and energy financing,” he said.
Slower economic growth in Brazil isn’t stopping ING’s expansion in those business, the two executives said.
“If you want to talk about pessimism, come to Europe,” Hamers said. “The economy is growing here,” he said of Brazil. “Things are happening, and, in comparison to Europe, the economy is healthy.”
The European Central Bank’s attempt to inject liquidity into the markets has had only a limited effect on growth, according to Hamers.
“If the ECB measures are not supported by some structural changes in order to make European businesses more competitive, then their effect will be limited,” he said, adding that some countries need to reduce labor costs through tax cuts.